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State Budget Director Says Volatility Lies Ahead for State Finances

State Capitol - file photo
Melissa Benmark
/
WKAR

The state’s top budget official says he would support limiting the amount of money a business could claim in tax credits each year. 

Michigan faces a significant budget hole this year and next. That’s because an unexpected number of businesses are cashing in tax credits that were created during the recession to help spur economic growth. State Budget Director John Roberts says something must be done to make revenues more predictable.

“We feel very good about how we covered it, but I would still admit very publicly that there’s still volatility in the numbers, so more predictability would be a great thing for us,”

Roberts said over the weekend on the Michigan Public Television program “Off the Record.” Gov. Rick Snyder and lawmakers recently approved cuts to several state departments to help fill the budget hole. The Legislature is also moving to divert surplus money from the School Aid Fund.

May roads ballot proposal

Roberts also urged voters to say “yes” to the May ballot proposal to increase the state’s sales tax. He says the state’s roads will continue to crumble if the measure fails. He says there won’t be room in the budget to add more general fund dollars for roads, as lawmakers have done in recent years.

“We’re going to get the federal match for transportation. I don’t envision a lot more,” he said during the appearance. “Even if we come up with another $50 million, the decay in the roads will still continue.”

The May ballot proposal would boost road funding by more than $1 billion a year and raise the sales tax from six percent to seven percent. It would also boost money for schools and local governments. Opponents say it would hurt businesses and consumers.

Dems claim of education “cut” in new budget

Roberts also used the appearance to defend Gov. Snyder’s school funding proposal, which has been criticized by Democrats. The proposal would increase school funding by at least $75 per student for every district. But critics say some districts could effectively see a cut because they will lose state grants. Roberts says schools knew that was one-time money.

“Anybody who says, hey, it’s a cut - that’s like saying, hey, I didn’t get the same amount of overtime I did last time.”

Legislative leaders hope to finalize the 2015-2016 state budget by June.

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